Vol.39-No.10 October 1, 2000
The fiscal 2000 Economic Survey of Japan has been released. The report's subtitle is “A New Era Begins.” The first chapter gives its view of Japan's current economic situation. The following chapter discusses the conditions for sustainable development, with an emphasis on the effects of information technology (IT).
While the economy has shown some signs of gradual improvement, the report argues that it is not yet on track to full recovery. Despite sluggish sales in non-manufacturing sectors, both manufacturing and non-manufacturing firms have cut back on labor and variable costs, resulting in a recovery in profits. The number of regular employees decreased, whereas the number of temporary and daily-contracted employees continued to increase. Moderate economic recovery and on-going employment adjustment mean that firms are now less concerned about carrying excess employees. Wages have started to recover, though they continued to decline as a result of curtailing bonus payments. On the other hand, structural and frictional unemployment, as well as demand deficiency unemployment, rose. The report pointed out that the increase in the number of jobs in response to economic recovery is slower than before, and that the growth in wages relative to a firm's profits tends to be smaller.
The report also says that although the long-term impact of IT is not yet fully understood, it appears increasingly likely to offer a major impetus to the economy, analogous to that of the steam engine, electricity and the automobile in the past. With regard to employment, the report notes that the number of employees in managerial posts has fallen while dispatched workers are in increasing demand. It also reported that the number of people willing to tele-work (including those working from home) has increased.
To respond to the new technology, the report also emphasizes the importance of fostering creative talent, providing education to match the demand for fresh ideas, and allowing the labor market to meet changing requirements. It stresses the importance of university education (rather than entrance examinations), the necessity to develop specialized talent, and the need to create labor markets which will allow people with a wide range of talents to find appropriate jobs.
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